Who Will Take Care of You? Long-Term Care and Why It Matters
One important piece of the puzzle usually gets overlooked: long-term care.
When it comes to thinking about our financial future, most of us think about retirement, investment planning or paying off the mortgage. But one important piece of the puzzle usually gets overlooked: long-term care. For millions of Americans, it will become a significant—and expensive—reality. Yet most people know little about what it involves or how to plan for it.
What Is Long-Term Care?
Long-term care refers to a range of services designed to help individuals with chronic illnesses, disabilities, or cognitive impairments. These ‘activities of daily living’ as they are called are often taken for granted—such as bathing, dressing, eating, and taking care of other things around the house.
Unlike ordinary medical care, aiming to treat or cure an illness or disease, long-term care is all about taking care of a person when full independence is no longer possible. Help may be provided at home, in assisted-living communities, or in nursing facilities. Long-term care is provided either by family members or paid caregivers at home, or at a facility. It could be necessitated by either a physical need or some form of dementia or Alzheimer’s.
Who Needs It?
According to the 2024 U.S. Department of Health and Human Services and Genworth’s Cost of Care Survey, 45% of individuals will need long-term care for more than a year, with ½ of those needing care for five years or more!1
Factors like lifestyle, family medical history, and gender can all influence the likelihood and duration of care. As an example, women tend to live longer and are more likely to live alone in later life, increasing their chances of needing long-term care.
Why It’s So Costly—and Why Insurance Matters
Here’s the hard truth: long-term care is expensive. According to recent data, the average annual cost of a private room in a nursing home exceeds $100,000.2 In-home care can cost that or more, depending on the level of assistance required.
Unfortunately, many people mistakenly believe that Medicare will cover these costs. In reality, Medicare covers medical costs in a hospital or in the Doctor’s office. For individuals who have spent their entire life savings, the Federal Government’s Medicaid program covers long-term care in certain parts in some facilities. Without government assistance, you’ll need to rely on the investments you’ve accumulated or consider long-term care insurance.
Who Should Consider Long-Term Care Insurance?
Long-term care insurance can help cover the costs of care without draining investments or burdening family. You may need to consider insurance coverage if:
- You have assets you’d like to protect (such as a home, savings, or investments)
- You have a spouse or significant other who will need the assets you’ve accumulated
- You do not qualify for Medicaid but worry that long-term care expenses could erode your retirement plan
If appropriate, you should consider buying a policy as early as possible. The coverage is cheaper if purchased at a younger age. Additionally, if you have health issues later in life, you may not be able to obtain the coverage. Policies vary widely in terms of coverage, cost, and eligibility, so you’ll need to do your research before selecting a policy and the options. This can be part of a full planning conversation with a OneDigital financial advisor.
The Bottom Line
Long-term care isn’t the most glamorous topic, but it’s one of the most important to understand. Planning ahead can offer peace of mind and financial security in the years to come. The earlier you start thinking about it, the more options you’ll have.
If you’re interested in learning more, schedule a time to meet with our team and take the next step toward financial clarity and growth.
Looking for more information or to speak with an advisor? Our Financial Academy page has you covered! Find helpful resources to help you do your best work and live your best life.
Investment advice offered through OneDigital Investment Advisors LLC (“ODIA”). Insurance products are available through OneDigital Insurance LLC., an affiliate of ODIA, or by Investment Advisor Representatives of ODIA in their separate capacities as independent insurance agents.
1Genworth and CareScout Release Cost of Care Survey Results for 2024
2 What long-term care costs does Medicare cover?
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